Presentation of the 2024 full-year results for the Julius Baer Group

Ad hoc announcement pursuant to Art. 53 LR

Client assets at record high, with stronger net new money inflows – IFRS net profit up 125% – Dividend stable at CHF 2.60 per share – Cost programme extended – Executive Board downsized to five members

• Assets under management (AuM) at record CHF 497 billion, up 16%, driven by net new money of CHF 14 billion, rising stock markets, and weaker Swiss franc.
• Operating income growth moderated by year-on-year rise in interest expense. Gross margin of 83 basis points (bp), versus 88 bp (underlying) in 2023.
• Higher operating expenses reflect investments in hiring and technology. Adjusted cost/income ratio 70.9%, versus 69.1% (underlying) in 2023.
• IFRS net profit increased to CHF 1,022 million (+125%) and IFRS EPS attributable to shareholders rose to CHF 4.98 (+125%), helped by substantial tax release.
• Solid capitalisation, with increased CET1 capital ratio of 17.8% (end-2023: 14.6%), total capital ratio of 26.4% (end-2023: 24.0%), and stable leverage ratio of 4.9%.
• Basel 3 final standards (B3F) fully implemented in Switzerland starting in 2025. B3F-equivalent end-2024 CET1 capital of 14.2%, B3F-equivalent total capital ratio of 21.1%.
• Highly liquid balance sheet with liquidity coverage ratio of 292% (end-2023: 291%).
• Proposed unchanged ordinary dividend of CHF 2.60 per share.
• Cost programme extended, targeting additional CHF 110 million gross savings.
• Executive Board reduced to five members.

Zurich, 3 February 2025 - Stefan Bollinger, Chief Executive Officer of Julius Baer Group Ltd., said: “My first few weeks at Julius Baer have confirmed all the reasons why I took up the CEO role and further strengthened my conviction in its distinctive positioning. Given its high-quality client portfolio and excellent people, as well as its strong and resilient brand and unique dedication to wealth management, I believe Julius Baer has the strong foundation and all the ingredients to succeed. This is reaffirmed by the results we are communicating today – an outcome that could not have been taken for granted a year ago. I would like to commend my colleagues for their work. Building on Julius Baer’s historic strengths, this represents a solid starting point to address the challenges we have on both the revenue and cost side.”

Nic Dreckmann, Chief Operating Officer and former Chief Executive Officer ad interim of Julius Baer Group Ltd., said: “2024 has brought to the fore the resilience of our franchise. Thanks to the relentless efforts of our staff and our strong client relationships, we have closed the year with the highest level of assets under management ever, fuelled by accelerated net new money inflows in the second half of the year. At the same time, we spared no effort in strengthening our overall risk framework and controls, thereby delivering on the commitments made a year ago. We also continue to make progress on the further streamlining of our operating model. Our teams and I look forward to continuing the work started and upgrading our efforts under Stefan’s leadership, benefitting from his experience and fresh perspective.”

Alternative performance measures and reconciliations

This media release and other communications to investors contain certain financial measures of historical and future performance and financial position that are not defined or specified by IFRS. Management believes that these alternative performance measures (APM), including adjusting the results consistently for items related to M&A activities, provide useful information regarding the Group’s financial and operating performance. These APM should be regarded as complementary information to, and not as a substitute for, the IFRS performance measures. The definitions of APM used in this media release and other communications to investors, together with reconciliations to the corresponding IFRS line items, are provided in the Alternative Performance Measures section of the Extract of the Annual Report 2024, available at www.juliusbaer.com/reports.

AuM growth driven by broad stock market rally, currencies, and net new money inflows

Assets under management grew by CHF 70 billion (+16%) to a record CHF 497 billion. This increase was driven by rising global equity market valuations; a positive currency impact, mainly from the weakening of the Swiss franc against the US dollar; as well as net new money inflows, which accelerated meaningfully in the second half of the year. Monthly average AuM rose by 7% year on year to CHF 467 billion. Including assets under custody of CHF 93 billion, total client assets rose by 15% to an all-time high CHF 590 billion.

Net new money inflows improved to CHF 14.2 billion (3.3% growth rate), a year-on-year increase of 14%, with solid net contributions from clients domiciled in strategic key markets in Europe (especially the UK, Germany, and Switzerland), Asia (particularly Singapore, Hong Kong, and India), and the Middle East (especially the UAE). Deleveraging by clients came to a halt towards the end of the year.

Operating income growth moderated by higher interest expense

In 2024, operating income increased by 19% (CHF 621 million) to CHF 3,861 million. However, the operating income in the preceding year (2023) was impacted by a significant increase in specific loss allowances against the single largest exposure in the Group’s private debt loan book, resulting in net credit losses of CHF 586 million (CHF 475 million, net of taxes) (‘large private debt credit loss’). Excluding the large private debt credit loss from the 2023 results, the underlying year-on-year increase in operating income was 1% (CHF 35 million), as the combined benefit of significant growth in net commission and fee income and net income from financial instruments at fair value through profit or loss (FVTPL) compensated for the effect of lower net interest income. The gross margin came in at 83 bp, compared to an underlying gross margin of 88 bp in 2023.

Net commission and fee income grew by 14% to CHF 2,204 million. Recurring income (the sum of advisory and management fees and commission and fee income on other services) rose by 10%, resulting in a 1 bp increase in the recurring fee gross margin to 37 bp. Client activity improved year on year, driving a 26% increase in brokerage commissions and income from securities underwriting, while commission expense rose by 11%.

Net income from financial instruments measured at FVTPL grew by 21% to CHF 1,282 million. Treasury swap income benefitted mainly from a rise in average differentials between (mainly) US and Swiss interest rates, as the Swiss National Bank started reducing rates before the US Federal Reserve did. At the same time, trading income was supported by an increase in client activity mainly around structured products.

Net interest income declined by 55% to CHF 377 million. While interest income from the treasury portfolio (the sum of interest income on debt instruments at fair value through other comprehensive income (FVOCI) and interest income on debt instruments at amortised cost) rose by 20% to CHF 597million, interest income on loans declined by 7% to CHF 1,627 million. Further year-on-year shifts of client assets from current accounts to time and call deposits resulted in a 17% increase in interest expense on amounts due to customers to CHF 1,813 million, while interest expense on amounts due to banks increased by CHF 92 million to CHF 188 million.

Other ordinary results declined by 28% to CHF 12 million, and net credit losses on financial assets amounted to CHF 15 million (2023: CHF 606 million, mainly because of the large private debt credit loss that year; 2023 underlying: CHF 20 million).

Higher operating expenses reflect investments in hiring and technology

Operating expenses according to IFRS increased by 3% to CHF 2,807 million, as the combined impact of a 5% increase in personnel expenses to CHF 1,789 million and a 2% increase in amortisation and impairment of intangible assets to CHF 145 million was partly offset by a 2% decrease in depreciation of property and equipment. General expenses increased marginally, by CHF 1 million, to CHF 773 million.

As in previous years, in the analysis and discussion of the results, adjusted operating expenses exclude M&A-related expenses (CHF 24 million in 2024 and CHF 21 million in 2023). M&A-related amortisation and impairment of customer relationships fell to CHF 6 million (2023: CHF 13 million), while other M&A-related expenses rose to CHF 18 million (2023: CHF 8 million). The reconciliations to the respective IFRS line items are provided in the Alternative Performance Measures section of the Extract of the Annual Report 2024, available at www.juliusbaer.com/reports.

Adjusted operating expenses rose by 3% to CHF 2,782 million.

Adjusted personnel expenses increased by 4% to CHF 1,778 million, less than the 5% year-on-year growth in the monthly average number of full-time equivalent employees (FTEs). The number of FTEs rose by 170, to a total of 7,595, which included 1,380 relationship managers (RMs) – an increase of 37 (or 57 when adjusting for the sale and deconsolidation of Kairos in May 2024).

Adjusted general expenses grew by CHF 1 million to CHF 767 million, helped by an CHF 18 million decrease in provisions and losses to CHF 44 million. Excluding provisions and losses, adjusted general expenses rose by 3% to CHF 723 million, driven predominantly by higher IT-related expenses.

While adjusted amortisation and impairment of intangible assets increased by 7% to CHF 138 million, mainly reflecting the rise in IT-related investments in recent years, depreciation of property and equipment declined by 3% to CHF 100 million.

This resulted in an adjusted cost/income ratio (excluding adjusted provisions and losses) of 70.9%, compared to 81.6% in 2023 (69.1% excluding the large private debt credit loss), and an adjusted expense margin (also excluding adjusted provisions and losses) of 59 bp, compared to 61 bp in 2023.

Cost programme

At the start of 2024, Julius Baer increased its target for the 2023–2025 cost reduction programme from originally CHF 120 million to CHF 130 million (gross). By the end of 2024, the underlying cost initiatives reached CHF 140 million gross cost savings on a run-rate basis. The total cumulative programme-related restructuring costs to date amount to CHF 39 million, out of which CHF 24 million were booked in 2024.

Despite these meaningful savings, the adjusted cost/income ratio is still unsatisfactory and far removed from the <64% target that had originally been set for 2025. Therefore, the decision has been made to extend the ongoing 2023–2025 cost programme, aiming to deliver a further CHF 110 million gross general expense and personnel cost savings on a run-rate basis by the end of 2025. The costs to achieve these target savings are currently estimated at approximately CHF 55 million, expected to be booked in 2025.

Higher profitability boosted by substantial tax release

IFRS profit before taxes increased by 105% to CHF 1,054 million. With income taxes 47% lower at CHF 32 million, IFRS net profit and IFRS EPS attributable to shareholders both increased by 125%, to CHF 1,022 million and CHF 4.98 respectively.

Adjusted profit before taxes rose by 102% to CHF 1,078 million, and the adjusted pre-tax margin by 11 bp to 23 bp. The related adjusted income taxes dropped by 49% to CHF 32 million, resulting in an adjusted tax rate of 2.9% (2023: 11.7%; 2023 underlying: 15.5%). The significantly lower tax rate resulted from a substantial release of tax provisions following the successful completion of a Swiss corporate income tax audit covering the financial years 2017−2022. Adjusted net profit for the Group and adjusted EPS attributable to shareholders both increased by 122%, to CHF 1,047 million and CHF 5.10 respectively. The adjusted return on CET1 capital (RoCET1) rose to 32% (2023: 15%; 2023 underlying: 30%).

Excluding the large private debt credit loss from the 2023 results, adjusted profit before taxes declined by 4% year on year and the adjusted pre-tax margin by 3 bp. On the same underlying basis, adjusted net profit for the Group and adjusted EPS attributable to shareholders both rose by 11%.

Highly liquid balance sheet

Partly reflecting the weaker Swiss franc (especially vs the US dollar), the balance sheet grew by 9% to CHF 105 billion. Loans increased by 7% to CHF 42 billion – comprising CHF 9 billion of mortgages (+3%) and CHF 33 billion of Lombard loans (+8%), the latter including CHF 0.4 billion of private debt loans (2023: CHF 0.8 billion). As the due to customers position (client deposits) increased by 9% to CHF 69 billion, the loan-to-deposit ratio declined to 61% (end-2023: 62%).

Cash, largely held at central banks in Switzerland and Europe, decreased by 15% to CHF 8 billion. The total treasury portfolio, recorded under financial assets measured at FVOCI (down 17% to CHF 11 billion) and other financial assets measured at amortised cost (down 5% to CHF 5 billion), decreased by 14% to CHF 16 billion.

Equity attributable to shareholders of Julius Baer Group Ltd. grew by 11% to CHF 6.8 billion.

The balance sheet remained highly liquid, with a liquidity coverage ratio of 292% (end-2023: 291%).

Development of capital ratios and tier 1 leverage ratio

CET1 capital rose by CHF 0.6 billion, or 21%, to CHF 3.6 billion, as the combined benefits of strong net profit generation and the continued ‘pull-to-par’ reversal of the decline, back in 2021 and 2022, in the value of bonds held in the Group’s treasury portfolio (financial assets measured at FVOCI) exceeded the impact of the dividend accrual.

Modestly impacted by the redemption in September 2024 of the AT1 bonds issued in 2017 (USD 300 million aggregate nominal amount), tier 1 capital grew by CHF 0.5 billion (+10%) to CHF 5.3 billion, and total capital by CHF 0.4 billion (+9%) to CHF 5.3 billion.

Risk-weighted assets (RWA) decreased by CHF 0.1 billion, or 1%, to CHF 20.2 billion. The significant reduction in the private debt loan book to CHF 0.4 billion (end-2023: CHF 0.8 billion), at 100% credit risk weighting, limited the increase in credit risk positions, which grew by 1% to CHF 11.8 billion. Operational risk positions decreased by 2% to CHF 6.2 billion, market risk positions declined by 7% to CHF 1.6 billion, and non-counterparty-related risk positions went up by 2% to CHF 0.7 billion.

As a result, the CET1 capital ratio improved to 17.8% (end-2023: 14.6%) and the total capital ratio to 26.4% (end-2023: 24.0%).

The leverage exposure rose by 10% to CHF 107 billion, resulting in a year-end tier 1 leverage ratio of 4.9% (end-2023: 4.9%).

In Switzerland, the final Basel 3 set of standards (B3F) are fully implemented starting in 2025, and mainly impact the calculation of RWA. For Julius Baer, the application of the B3F methodology results in a very limited impact on credit risk weights. The inflationary impact on market risk weights stemming from the fundamental review of the trading book (FRTB) was largely mitigated by adjustments already implemented in relation to certain trading-related activities. The main impact for the Group is on operational risk weights, the calculation of which under B3F considers a bank’s historical internal loss data, reflecting operational losses incurred over the preceding ten-year period. On 30 December 2015, Julius Baer announced that it had reached an agreement in principle with the U.S. Attorney’s Office for the Southern District of New York with respect to a comprehensive resolution regarding its legacy U.S. cross-border business (2015 DOJ agreement). The 2015 DOJ agreement resulted in an overall provision of USD 547 million recorded in the Group’s 2015 consolidated financial accounts. While the Group had stopped providing its services to US-resident clients well before 2015, the loss tied to the 2015 DOJ agreement will still be relevant for the calculation of the operational risk requirements during 2025 and, as a result, will by itself temporarily inflate operational RWA by CHF 1.7 billion, before being eliminated again from the calculation at the end of 2025.

Because of the above, had B3F already been in place in 2024, the B3F-equivalent CET1 capital ratio would have been 14.2% and the B3F-equivalent total capital ratio 21.1%. Considering that the methodological impact of the 2015 DOJ agreement on the calculation of operational RWA ends at the end of 2025, the look-through B3F-equivalent CET1 capital ratio would have been 15.3% and the look-through B3F-equivalent total capital ratio 22.7%. The calculation of the leverage exposure is only marginally impacted by B3F, and the B3F-equivalent tier 1 leverage ratio would still have been 4.9% at the end of 2024.

At these levels, the CET1 and total capital ratios remained well above the Group’s own floors of 11% and 15% respectively, and significantly exceeded the regulatory minimum levels of 8.3% and 12.5% respectively. The tier 1 leverage ratio continued to be comfortably above the 3.0% regulatory minimum.

Proposed ordinary dividend unchanged at CHF 2.60 per share

In line with the Group’s capital distribution policy, the Board of Directors of Julius Baer Group Ltd. will propose an unchanged ordinary dividend of CHF 2.60 per share for the financial year 2024. Subject to shareholder approval at the Annual General Meeting (AGM) on 10 April 2025, the dividend will be paid on 16 April 2025. The dividend will be subject to 35% Swiss withholding tax.

The B3F-equivalent CET1 capital ratio of 14.2% at the end of 2024 is marginally above the Group’s 14% share buy-back floor as defined in the Group’s capital distribution policy. However, the Board of Directors has decided not to pursue the launch of a new share buy-back programme.

Sale of Julius Baer Brazil expected to close in the first quarter of 2025

On 7 January 2025, the Group announced the signing of an agreement to sell its domestic Brazilian wealth management business, Julius Baer Brasil Gestão de Patrimônio e Consultoria de Valores Mobiliários Ltda. (Julius Baer Brazil), to Banco BTG Pactual S.A. (BTG). Julius Baer will continue to service Brazilian clients out of other locations and as such, the Brazil International business remains unaffected. The closing of the transaction is subject to customary regulatory approvals and expected in the first quarter of 2025. The transaction is expected to be approximately 30 bp accretive to Julius Baer’s CET1 capital ratio at close, based on a total cash consideration of BRL 615 million (CHF 91 million). The closing of the transaction is currently expected to result in a one-off impact to operating income of approximately CHF 120 million, mainly resulting from non-cash cumulative currency translation adjustments already recognised in the Group’s equity.

Changes to the Executive Boards

With immediate effect, the Executive Boards of Julius Baer Group Ltd. and Bank Julius Baer & Co. Ltd. will both be substantially resized and consist newly of the following individuals:

• Stefan Bollinger, Chief Executive Officer
• Nic Dreckmann, Chief Operating Officer and Deputy CEO
• Oliver Bartholet, Chief Risk Officer
• Evie Kostakis, Chief Financial Officer
• Christoph Hiestand, Group General Counsel

In the Executive Board, the CEO will assume direct responsibility for all revenue-generating activities and the front business, with the Region Heads and the heads of Markets and of Investment & Wealth Management Solutions reporting directly to the CEO. The Chief Operating Officer’s remit will be expanded to additionally cover the areas of Client Strategy & Experience and HR & Corporate Affairs, aiming at enhancing client satisfaction, improving operational efficiency, and continuing to upgrade our technology and infrastructure.

Stefan Bollinger said: “A new leadership structure and a leaner Executive Board will increase accountability, instil disciplined entrepreneurship top down, and reinforce our enduring client focus. This is the first move to create a leaner, more straightforward way of running our business. We are going to apply the same principles through the entire organisation. I am convinced our clients and all other stakeholders will feel the difference.”

Strategy update

Julius Baer will present a strategy update, including new medium-term targets, ahead of summer 2025. More details, including exact timing and venue, are expected to be communicated together with the publication of the Annual Report 2024 on 17 March 2025.

__________________________

The results presentation to analysts and investors by Stefan Bollinger (Chief Executive Officer), Nic Dreckmann (Chief Operating Officer), and Evie Kostakis (Chief Financial Officer) will be webcast live at 8.30 a.m. (CET). This will be followed by a presentation to media at 10.30 a.m. (CET). All documents (presentation, Extract of the Annual Report 2024, time series spreadsheets, and this media release) are available at www.juliusbaer.com.

Contacts

Media Relations, tel. +41 (0) 58 888 8888

Investor Relations, tel. +41 (0) 58 888 5256

Important dates

17 March 2025: Publication of Annual Report 2024, including Remuneration Report 2024

17 March 2025: Publication of Sustainability Report 2024

10 April 2025: Annual General Meeting, Zurich

14 April 2025: Ex-dividend date

15 April 2025: Record date

16 April 2025: Dividend payment date

22 May 2025: Publication of Interim Management Statement for first four months of 2025

22 July 2025: Publication and presentation of 2025 half-year results

About Julius Baer

Julius Baer is the leading Swiss wealth management group and a premium brand in this global sector, with a focus on servicing and advising sophisticated private clients. In all we do, we are inspired by our purpose: creating value beyond wealth. At the end of 2024, assets under management amounted to CHF 497 billion. Bank Julius Baer & Co. Ltd., the renowned Swiss private bank with origins dating back to 1890, is the principal operating company of Julius Baer Group Ltd., whose shares are listed on the SIX Swiss Exchange (ticker symbol: BAER) and are included in the Swiss Leader Index (SLI), comprising the 30 largest and most liquid Swiss stocks.

Julius Baer is present in around 25 countries and 60 locations. Headquartered in Zurich, we have offices in key locations including Bangkok, Dubai, Dublin, Frankfurt, Geneva, Hong Kong, London, Luxembourg, Madrid, Mexico City, Milan, Monaco, Mumbai, Santiago de Chile, Shanghai, Singapore, Tel Aviv, and Tokyo. Our client-centric approach, our objective advice based on the Julius Baer open product platform, our solid financial base, and our entrepreneurial management culture make us the international reference in wealth management.

For more information visit our website at www.juliusbaer.com

Cautionary statement regarding forward-looking statements

This media release by Julius Baer Group Ltd. (‘the Company’) includes forward-looking statements that reflect the Company’s intentions, beliefs or current expectations and projections about the Company’s future results of operations, financial condition, liquidity, performance, prospects, strategies, opportunities, and the industries in which it operates. Forward-looking statements involve all matters that are not historical facts. The Company has tried to identify those forward-looking statements by using the words ‘may’, ‘will’, ‘would’, ‘should’, ‘expect’, ‘intend’, ‘estimate’, ‘anticipate’, ‘project’, ‘believe’, ‘seek’, ‘plan’, ‘predict’, ‘continue’ and similar expressions. Such statements are made on the basis of assumptions and expectations which, although the Company believes them to be reasonable at this time, may prove to be erroneous.

These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause the Company’s actual results of operations, financial condition, liquidity, performance, prospects, or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing business or other market conditions, legislative, fiscal and regulatory developments, general economic conditions in Switzerland, the European Union and elsewhere, and the Company’s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance or achievements to differ materially. In view of these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. The Company and its subsidiaries, and their directors, officers, employees and advisors expressly disclaim any obligation or undertaking to release any update of or revisions to any forward-looking statements in this media release and any change in the Company’s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation.